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Ideas
Information
Impact
Brexit—Results of a consultation with IPG members
Based on an online survey of 115 publisher members in July 2016.
Headline findings
The biggest challenges for IPG members following the Brexit vote are the higher costs of doing business and depressed high street spending.
The only significant opportunities stem from a weaker pound: making exports more competitive and encouraging foreign investment. Many members say they see no opportunities as a result of the vote.
The major policy challenges are reduced input into digital single market and open access policies, and the loss of exclusive European rights.
Members think reducing VAT on digital content and protecting copyright are the major policy opportunities.
The status of EU nationals, access to the digital single market, freedom of movement and a speedy exit rank in roughly equal importance for members in Brexit negotiations.
Three in four members anticipate no change to their investment plans following the Brexit vote, though one in five expects to put some plans and contracts on hold.
North America will remain the most important export market post-Brexit, followed by Europe and Australasia.
1 What do you think the major challenges will be for your business following Britain’s decision to leave the EU?
Business Challenge
%
Higher costs of doing business (such as higher import costs or higher costs selling to EU)
63.5
Depressed spending on the high street due to lower consumer confidence
45.2
Reduced funding (academic research; Higher Education Institutes; translated works)
27.0
Changes to contract or IP law
20.9
Uncertainty over the status of European nationals working for you
8.7
Difficulty in moving workforce around European locations / harder to recruit from the EU
3.5

See Appendix for ‘Other’ responses.
2 What do you think the major opportunities will be for your business following Britain’s exit from the EU?
Business Opportunity
%
A weaker pound making exports more competitive
58.3
A weaker pound encouraging foreign investment in the UK
46.7
Government being more open to hearing from business
16.5
Ability to more easily target fast growing markets outside the EU
10.4

See Appendix for ‘Other’ responses.
3 What do you think are the major policy challenges for the publishing industry post-Brexit?
Policy challenge
%
Reduced UK voice in the digital single market proposals
42.6
UK publishers losing exclusive English language rights in Europe
40.9
Less UK influence on the development of open access policies in Europe
33.0
A renewed push to introduce a fair use doctrine in the UK
18.3

See Appendix for ‘Other’ responses.
4 What do you think are the major policy opportunities for the publishing industry following Britain’s exit from the EU?
Policy opportunity
%
Getting VAT reduced on epublications
51.3
Strong Government commitment to the existing copyright framework
39.1
Introduction of a duty of care on internet intermediaries to not point consumers to illegal content
20.9
Extension of Public Lending Right to elending without impacting commercial arrangements
15.7

See Appendix for ‘Other’ responses.
6 What are the most important things the UK should focus on during its negotiations to leave the EU?
Area
%
Securing the status of EU nationals living in the UK
39.1
Securing access to the digital single market
38.3
Retaining freedom of movement
38.3
Securing a speedy exit to increase business certainty
27.8

See Appendix for ‘Other’ responses.
7 Will your business’s investment plans change following the Brexit vote?
Change
%
No change
74.8
Yes - will put projects and contracts on hold
19.1
Yes - will cut staff levels / hire fewer staff / decrease wages
5.2
Yes - will increase investment in projects and sign more contracts
1.7
Yes - will invest more in hiring staff / increase wages
0.0
8 Which regions will be the most important export markets for your business post-Brexit?
Region
%
North America
73.9
Europe
47.0
Australasia
41.7
East & South Asia
23.5
Africa Sub Sahra
7.8
Middle East and North Africa
6.1
Other Americas
5.2
Appendix: ‘Other’ responses
Other business challenges
• Depressed sales to schools and libraries as funding continues to be threatened. Also, I am an EU national (Irish): not feeling particularly good about the anti-immigrant rhetoric. Considering moving back to Ireland and running my company there.
• As law publishers, adapting to the new regime will provide both challenges and opportunities so working out which ones to pursue will be the crucial thing.
• We are paying higher advances due to the current exchange rate.
• Following the vote to leave in England and Wales, the greatest challenge for us is the inevitable disruption caused by Scotland leaving the United Kingdom and negotiating to stay in the EU.
• Also possible reduced funding / grants, eg from Welsh Books Council.
• No challenges whatsoever. I think the move from the EU will be a positive force for democracy in this country.
• Reduced level of translation funding from EU based cultural institutions.
• Cost of travel as mine is an export business.
• Higher print costs due to exchange rate—already feeling the impact.
• Confusion over business practices for non-EU country.
• Euro exchange rate volatility.
• We drive to a lot of weekend events in Europe to sell books direct to the consumer. At the moment it is hassle free. We just need to load the van up and go. No customs, no permits. Will that change? Even a small cost or increased paperwork will curtail things.
• Uncertainty re print and paper costs, and co-edition partnerships with European publishers • Currency depreciation affects cost of printing colour books in China.
• No change apart from possibly higher European / Far East print prices, offset by greater income from the devaluation of the pound from export sales.
• There is an immediate uncertainty surrounding the ability of academics (our authors and customers) to move freely around the EU, and certainly a concern about current and future employees who are citizens of other EU countries. I tend to feel that a system will be arrived at in which some rights of movement are protected—and so I opt above to focus on reduced funding as being the key challenge. In the context of a likely economic slowdown, our possible exclusion from EU research networks and a government which is unlikely to prioritise the Humanities and Social Sciences in its spending priorities, we could be in a for a tougher time.
• Keeping abreast of changes to legislation that occur as a result of leaving the EU.
• We have already been impacted with the low pound rate, as all shipping prices and import costs have gone up. We have really suffered and it is still early days!
• We operate in the UK using a UK limited company, but I manage the company from Spain. Brexit will offer us some unique challenges. I expect that I will be forced to close the UK base for everything except printing and distribution—it is very disappointing.
• In general, I am concerned about the prospect of being able to present and license rights of content into the European markets.
Other business opportunities
• I'm not sure the EU ever prevented me from accessing fast growing markets outside the EU. I trade with Brazil, Korea and China without problems.
• Focusing on other developed markets that previously took second place to EU customers (USA, Australia).
• Law publishers may have plenty of opportunity to publish on areas of change (eg what happens if we ditch the Working Time Directive or the Human Rights Act?)
• We haven't managed to find any opportunities for us.
• Nothing has improved for us.
• We expect Scotland to stay in the EU.
• Hopefully the reduction of VAT on ebooks.
• None that I can see at this stage.
• I fail to see any realistic opportunities from Brexit.
• A greater interest in translated literature from EU countries in pro-Europe readers.
• None that I can see.
• |I don't see one—weaker pound offset by higher import cost and maybe tariffs.
• Hard to see an upside. However, our sales may improve a little in overseas territories (though these sales are currently very small). • I really can't see any significant opportunities.
• Our books are not especially price-sensitive; a weaker pound makes our exports more profitable.
• If the new Chancellor reduces business taxes and so on to stimulate growth.
• No opportunities. Exports not price sensitive.
• There are no opportunities resulting from the Brexit position. This company has always traded throughout the world, and membership of the European Union has never presented any form of obstacle to our doing so.
• Weaker pound encouraging more Gallery visitors / customers.
• Totally anti-Brexit so hard to give 'an opportunity' perspective!
• Stay at home holidays and more visitors—perhaps.
• They're list specific, but changes in the immigration rules around citizenship and rights to residence of migrants tend to work well for us.
• The ability to more easily target fast growing markets outside the EU is reliant on UK quickly signing trade agreements.
• Given the nature of our business there are no foreseeable opportunities.
• I remain unclear how this can be an opportunity. The publishing industry relies on strong links with Europe.
• One step closer to Scottish independence and re-joining the EU.
• It doesn't present any opportunities.
Other policy challenges
• Losing exclusive English language rights in Europe will be extremely costly as the US is likely to take advantage.
• Enduring a recession. Taken less seriously in Europe commercially and culturally.
• Data protection and the ability to use it.
• The biggest challenge is the same as it was pre-Brexit—being more inclusive!
• Uncertainty in many areas in the next few years.
• Reduced access to EU markets, reduced willingness to ‘buy British’.
• Maintaining current VAT status.
• In trade publishing, we've mostly lost exclusive Europe, but the weak pound will undoubtedly make our books more competitive against the US editions.
Other policy opportunities
• I don’t think cutting VAT on e-publications will happen as the Government needs the cash.
• Increasing trading links with other English language markets.
• None that I can see.
• Don't see any opportunities.
• VAT reduced or made zero like print.
• I don't think there are any opportunities.
• None.
Other areas the Government should focus on in Brexit negotiations
• Securing access to the single market, period (ie not confined to digital).
• Debating whether there is a need to be restrained by the shackles of the single market.
• I think the UK should focus on not leaving the EU. The most moronic decision I have come across in my professional life. If negotiations go the way I fear then I will very seriously consider selling my business and leaving the country. I have already been moving a large sum of my private investments abroad.
• But without eroding copyright framework.
• Not triggering Article 50 and not leaving the EU! The decision to trigger this lies with Parliament and we should campaign strongly NOT to leave. The referendum was outrageously badly managed and the campaigns built upon lies.
• Retaining the right of the UK Government to make and implement its own legislation.
• Simplifying regulations that deter innovation for small businesses (such as VAT MOSS).
• Securing the status of British nationals living in Europe.
• We need to focus on collaboration with our neighbours, especially given that the Leave campaign was only won on margin and many people still voted Remain. It is this factor that should be taken into consideration, especially as we need to protect the interests of those who are studying and those who are entering the workforce for the first time. To remove ourselves from the EU would be detrimental in my opinion.
• Securing the status of British nationals living in the EU, and their right to work.
• Ensuring that we can trade with the EU without tariffs.
IPG, July 2016